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Special Litigation Report

The following is an update from the National Association of Tobacco Outlets (NATO) sourced through their June 19th online bulletin. Reposted with permission.

Lawsuit Filed Against Edina, Minnesota Flavor Ban Ordinance

On June 17, 2020, R.J. Reynolds Tobacco Company, American Snuff Company, LLC, Santa Fe Natural Tobacco Company, Inc., and two independent retailers doing business as Vernon BP and Lang’s One Stop Market, respectively, filed a lawsuit in the Federal District Court for the District of Minnesota against the City of Edina, Minnesota seeking declaratory and injunctive relief against a city ordinance which bans the sale of menthol cigarettes and every flavored tobacco product.  Edina is a suburb of Minneapolis, Minnesota.

Background:  On June 16, 2020, the Edina, Minnesota City Council approved an ordinance that prohibits the sale of menthol cigarettes and all flavored tobacco products.  While the original recommendation from the Edina Community Health Commission was to ban the sale of flavored electronic cigarettes/nicotine vapor products to reduce the youth vaping rate, the Edina city staff subsequently broadened the scope of the ordinance making it illegal for any retailer to sell any flavored tobacco product that has a taste or smell other than the taste or smell of tobacco.

Legal Claims Against the City of Edina:  The lawsuit filed against the City of Edina, Minnesota has two main claims.

  1. Express Pre-Emption Claim

The Family Smoking Prevention and Tobacco Control Act (the federal law that authorizes the FDA to regulate tobacco products) expressly denies state and local governments the ability to adopt a tobacco product standard that is “different from, or in addition to” federal tobacco product standards.  A product standard is a power granted to the FDA by Congress to reduce or eliminate an additive or constituent in a tobacco product or tobacco product smoke.  Despite this pre-emption provision in the federal law, the Edina City Council enacted a product standard because the ordinance regulates flavor ingredients and constituents in cigarettes and tobacco products by banning the sale of flavored tobacco products.  Moreover, Congress enacted a special rule product standard as a part of the Family Smoking Prevention and Tobacco Control Act that banned flavored cigarettes other than tobacco and menthol-flavored cigarettes.  Since the Edina ordinance bans menthol cigarettes, this ban is “different from, and in addition to” the federal law allowing menthol cigarettes to be sold and, therefore, should be pre-empted.

  1. Implied Pre-Emption Claim

The Family Smoking Prevention and Tobacco Control Act also impliedly pre-empts the Edina ordinance because the regulations stand as an “obstacle” to the underlying purposes of this federal law.  The U.S. Supreme Court has held that this kind of “obstacle” pre-emption occurs when a state or local law “stands as an obstacle to the accomplishment of the full purposes and objectives of Congress.”  One of the underlying purposes of the Family Smoking Prevention and Tobacco Control Act is to authorize the FDA to set national product standards to control the manufacturing of tobacco products and the ingredients in the tobacco products.  Another purpose of the federal law is to continue to permit tobacco products to be sold to legal age adults while making them inaccessible to underage persons.  The Edina ordinance ban of flavored products is in direct conflict with these two purposes. Since the ordinance is in conflict with the federal law purposes, the Edina ordinance should be pre-empted under the “obstacle pre-emption” principle.

Request for Relief:  Under the lawsuit, the Federal District Court is being asked to issue a ruling that includes the following relief:

  1. Declare that the Family Smoking Prevention and Tobacco Control Act pre-empts the Edina ordinance ban on the sale of all flavored tobacco products, making the ordinance invalid and unenforceable.
  2. Issue a preliminary and permanent injunction preventing the City of Edina from enforcing and implementing the ordinance’s ban on the sale of all flavored tobacco products.

A copy of the complaint filed in this lawsuit is shown below:

Lawsuit Filed Against Philadelphia Flavor Ban Ordinance

On June 18, 2020, the Cigar Association of America, ITG Cigars, Swedish Match North America, and Swisher International filed a lawsuit in the Court of Common Pleas of Philadelphia County against the City of Philadelphia and the City of Philadelphia Department of Public Health seeking declaratory and injunctive relief against a city ordinance which bans the sale of certain flavored tobacco products.

Background:  On December 18, 2019, the Philadelphia City Council approved an ordinance that prohibits the sale of flavored tobacco products, excluding menthol cigarettes, in all retail stores except “Tobacco Product Distribution Businesses.”  A “Tobacco Product Distribution Business” is a retail store that does not allow minors to enter, does not sell food and beverages, and derives 90% or more of its revenue from the sale of tobacco products and accessories.

Legal Claims Against the City of Philadelphia:  The lawsuit filed against the City of Philadelphia and the City of Philadelphia Department of Public Health has six main claims including the following:

  1. Pre-Emption Claim

There are two laws which should pre-empt the City of Philadelphia from banning the sale of certain flavored tobacco products.  First, under Philadelphia General Assembly Law Title 53, the state law governing minors’ access to tobacco products expressly pre-empts and supersedes all local ordinances regarding access to tobacco products by minors.  Second, the Omnibus Amendments to the Pennsylvania Fiscal Code expressly pre-empts the City of Philadelphia from enacting regulations regarding the sale of tobacco products by licensed cigarette dealers.

  1. Vagueness Claim

The Philadelphia ordinance defines “characterizing flavor” to mean “any taste or aroma relating to fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, mint, wintergreen, herb or spice.  The phrase “relating to” is undefined and not susceptible to any clear meaning.  Also, there is no objective test or measure to determine an aroma and whether a taste or aroma is “related to” any of the listed flavors.  For these and other reasons, the ordinance should be found void for vagueness.

  1. Overbroad Claim

One of the main concerns cited in the Philadelphia ordinance and by the Commissioner of the City of Philadelphia Department of Public Health is to protect underage individuals from access to tobacco products.  That is, the City of Philadelphia was primarily focused on protecting underage youth.  However, by effectively banning the sale of flavored tobacco products, the ordinance overreaches in its scope as compared to the more narrowly defined intent of protecting minors.

Request for Relief:  Under the lawsuit, the Court of Common Pleas for Philadelphia County is being asked to issue a ruling that includes among the request the following relief:

  1. Declare that Pennsylvania state law pre-empts the Philadelphia ordinance ban on the sale of flavored tobacco products, making the ordinance invalid and unenforceable.
  2. Declare that the Philadelphia ordinance is void for vagueness.
  3. Issue a preliminary and permanent injunction preventing the City of Philadelphia from enforcing and implementing the ordinance’s ban on the sale of flavored tobacco products.

A copy of the complaint filed in this lawsuit is shown below:

 

State Legislative Bill Introductions

State tobacco-related legislative bills that have been introduced in the past week are listed below alphabetically by state:

Mississippi:  Senate Bill 2596, as amended, raises the minimum legal sales age to 21 and provides for more stringent penalties for sales within 1,500 feet of a school or 1,000 feet of a church, playground or other specified public areas to underage persons of alternative nicotine products, including e-cigarettes and other non-traditional nicotine products, was amended on the House floor and passed the House on June 16, 2020.

State Legislative Bill Actions

State tobacco-related legislative bills that have been acted on by a state legislative committee or state legislature are listed below alphabetically by state:

California: Assembly Bill 1639, a carryover bill from 2019, was amended on June 17, 2020 and now bans the sale of non-tobacco-flavored vapor products except those that have been approved through the FDA’s Pre-Market Tobacco Authorization process, taxes electronic cigarettes at a rate of $2.40 for every unit of 40 milligrams in the electronic cigarette (rounded up for each 40 milligram unit or portion of a unit) to fund certain health programs, requires retailers to check the identification of any tobacco purchaser using age verification software or an age verification device, increases penalties for sales to underage persons, allows retailers to offer money in lieu of a suspension for sale to an underage person, prohibits a person under the age of 21 from entering a tobacco store unless accompanied by a parent or guardian, requires the Department of Public Health to conduct random compliance checks on 20% of retailers annually, and becomes effective immediately upon enactment, except the tax which is effective on January 1, 2021.

Colorado:  House Bill 1427, which places a question on the November, 2020 general election ballot for voters to vote on that would increase the tax on cigarettes to $1.94 per pack in 2021, to $2.24 per pack in 2024, and to $2.64 per pack in 2027; establish a minimum retail price for a pack of cigarettes at $7.00 per pack (increases to $7.50 on July 1, 2024); and increase the tax on other tobacco products and nicotine products (including vapor products) to 50% of the manufacturer’s list price in 2021, 56% in 2024, and 62% in 2027, is eligible for the Governor after the House concurred with Senate amendments on June 15, 2020.  House Bill 1001, which increases the minimum sales age for tobacco products and vapor products from 18 to 21; requires all vapor and tobacco product retailers to obtain a license; and prohibits new tobacco product or vapor product retailers from being located within 500 feet of a school, is eligible for the Governor after the House concurred with Senate amendments on June 12, 2020.

Iowa:  Senate Bill 2268, which increases the minimum sales age for tobacco and vapor products to 21, passed the House on June 11th and sent to the Governor for signature on June 16, 2020.

Michigan: The following bills passed the Senate and moved to the House Regulatory Reform Committee on June 17, 2018: Senate Bill 781, which as amended, imposes a new tax on vapor products at the rate of 18% of the wholesale price. The previous version of SB781 imposed a new tax on vapor products at the rate of 24% of the wholesale price; Senate Bill 782, which requires a license to sell alternative nicotine products, and vapor products; Senate Bill 783, which prohibits the advertising of vapor products in a manner that causes a minor to believe that health benefits may be derived from the use of vapor products. SB783 also allows the sale of flavored vapor products; Senate Bill 784, which increases the legal age to purchase tobacco products, alternative nicotine products, and vapor products from 18 to 21 years of age; and Senate Bill 785, which modifies the age requirement provisions in the penal code relating to the sale or distribution of tobacco products by mail or vending machines.

New Hampshire:  House Bill 1410, which prohibits flavors other than menthol and tobacco for cartridges used in e-cigarettes and other vaping devices (exempts refillable tanks), was “laid on the table” in the Senate on June 16, 2020.  House Bill 1245, which was amended in the Senate to include language to increase the age to 21 for sales and possession of tobacco products, reported from the Senate Executive Departments and Administration Committee as “ought to pass as amended” on June 10th and passed the Senate on June 17, 2020.

North Carolina: House Bill 1080, which reduces the excise tax on tobacco products if those products are approved for modified-risk status by the Food and Drug Administration, passed the Rules, Calendar, and Operations of the House Committee on June 17, 2020.